Alibaba’s shares have surged 33% since January 10, driven by its newly released large language model that outperforms top competitors like DeepSeek and OpenAI’s GPT-4. The Chinese e-commerce giant is well-positioned for AI success, with access to vast algorithms, data, and computing power. Its cloud business is gaining momentum, with revenue growth of 7% in the latest quarter.
Despite slowing growth and geopolitical risks, Alibaba remains a strong investment opportunity. The company’s valuation is relatively low compared to its size, with a free cash flow multiple of 11x. Its AI push could boost profitability and unlock new revenue opportunities globally.
Analysts have given Alibaba a Strong Buy consensus rating, with an average price target of $121.33 per share, implying a 4% upside potential. With the company’s growing AI footprint, investors may find balanced long-term exposure to the AI boom. However, geopolitical tensions will continue to impact the stock, and investors should be prepared for volatility.
The company’s partnership with Apple is seen as a strategic move to reduce political risk. Alibaba’s cloud business is set to play a key role in its future success, driven by its AI capabilities. While challenges remain, the long-term potential of Alibaba’s AI push makes it an attractive investment opportunity.
Source: https://finance.yahoo.com/news/alibaba-baba-seeks-capitalize-ai-152425669.html